Insys founder, former execs face decades in jail after being found guilty in landmark opioid case

Insys should’ve paid heed to this ill-fated line from its own sales rap song. “If you want to be great, listen to my voice. You can be great — but its your choice.” Instead, its (former) billionaire founder John Kapoor and four of his high ranking colleagues were found guilty of engaging in a bribery scheme to get doctors to prescribe its potent, addictive painkiller and dupe insurers into paying for the drug, by a federal jury on Thursday.

Each defendant — former Chairman Kapoor; former vice-president of managed markets Michael Gurry; former national director of sales Richard Simon; and former regional sales directors Sunrise Lee and Joseph Rowan — faces up to twenty years in jail, although they have denied any wrongdoing and signaled plans to appeal. The criminal conviction is historic as it takes aim at the powerful masterminds behind a marketing ploy designed to put profit ahead of patients — instead of mere fines, or letting powerful executives make sacrificial lambs of their lieutenants.

Kapoor created Insys $INSY in 1990. In 2012, the company’s fentanyl spray Subsys was approved by the FDA for breakthrough cancer pain. Fentanyl is a man-made opioid 50 times more potent than heroin and 100 times more potent than morphine, according to the CDC. Three years later, Roddy Boyd of the Southern Investigative Reporting Foundation first brought to light the deadly impact of indiscriminate Subsys prescribing, triggered by Insys’ questionable marketing practices in this damning report. In 2017, the Indian-born Kapoor was charged with the criminal conspiracy — on the very day President Trump declared the US opioid crisis a public health emergency.

Prosecutors charged Insys with inflating Subsys sales by bribing doctors to prescribe the drug to patients without cancer — in an elaborate scheme that included wining and dining them, paying them to speak at “educational events” and in one case even a lap dance — fueling the raging opioid crisis that kills 130 Americans every day.

Trial jurors were given a front-row seat to the obscene video designed to train sales reps, in which two impeccably suited men — ostensibly Insys employees — ‘rap’ the Arizona-based drugmaker’s sinister strategy replete with rapid hand gestures: “I love titrations. Yeah, that’s not a problem. I got new patients, and I got a lot of ‘em…If you want to be great, listen to my voice. You can be great — but it’s your choice.”

Although Kapoor’s lawyers asserted that the 75-year-old was kept in the dark about these activities, the testimony of former Insys sales head Alec Burlakoff — who emerges as the man adorning the Subsys costume in the video that literally blueprints Insys’ reckless marketing strategy — sullied that argument as the government’s key witness. Burlakoff, along with former chief executive Michael Babich, testified against Kapoor after pleading guilty to participating in the scheme.

Alec Burlakoff

The trial’s verdict is indicative of the “actions of a select few former employees of the company,” Insys spokesperson Jackie Marcus told Endpoints News in an emailed statement, adding that “Kapoor’s (Insys) shares have been and will remain managed by an independent trust, with which Kapoor is not involved.”

Last August, Insys had agreed to fork over at least $150 million in a related settlement with the U.S. Justice Department. Under fire for the role in played in the crisis of opioid abuse, misuse and addiction in the United States, the company in November said it was looking to divest its arsenal of opioid assets — including Subsys — to sharpen its focus on its pipeline of cannabis-derived therapeutics.

Michael Babich

But as the company’s legal fees began to add up, Insys’ auditor last month raised doubts on the drugmaker’s ability to continue as a going concern. Insys is hardly the only opioid drug maker in financial trouble. Purdue Pharma — the maker of one of most widely abused prescription opioid painkiller Oxycontin — is reportedly considering bankruptcy.

Meanwhile, other drug manufacturers, distributors and pharmacies are also facing hundreds of civil lawsuits for their role in the propagating opioid crisis.

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